This new round of store closures will be made up of 85 clothing outlets, and 25 Simply Food stores. Complicating matters further, and to boost Marks and Spencer’s online presence, the company is also committed to raising £750-million to invest in a joint e-commerce venture with Ocado, the online grocery delivery chain. This new partnership will see Ocado offering a greater range of M&S grocery products through its online portal.
The first M&S appeared on the British retail scene in Leeds, West Yorkshire, in 1884, and today still maintains over 1,000 retail outlets. Seventy-five of which are pre-1939. Famous through the 20th century for selling only British made products, the company continued to prosper, and 21 years ago, became the first UK brand to register a one-billion pound pre-tax profit.
Unfortunately, 1998 was also the beginning of the end of the good times for Marks and Spencer, and many others like them. In 1994, Jeff Bezos famously sold his first book from his garage in Seattle, and Amazon.com was born. Over the ensuing years, thousands of e-commerce traders have followed in Amazon’s footsteps, and the switch by consumers to online shopping portals has increased exponentially since the new millennium.
Having seen the demise of many of their bricks and mortar retail cousins, and watched profits tumbling, M&S went on the offensive to reduce costs and streamline their UK store presence, while increasing their online profile. Although some closures have been bought forward spurred on by a 10% profit drop, the proposed closures are still broadly in line with the original restructuring plans.
The company is also moving away from textiles, and concentrating more on its food market development. M&S also plan to open 95 new grocery outlets as part of the redevelopment, partly funded by reducing its high street clothing retail space by approximately 25%, and moving 33% of its clothing sales online. Even with the latest profit knock, company management remain upbeat, although they warn investors not to expect much improvement until early 2020.
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